Sometimes There's Just Not Enough Rocks

In a recent Wall Street Journal article, Senator John McCain described the Jones Act as a “protectionist” law serving only U.S. shipping companies and maritime unions. He said the argument that the Jones Act is needed for national security is “laughable.” He would have us believe that foreign shipping companies are as patriotic as American companies trading on U.S. coastlines and inland waterways.

The world is a dangerous place where international laws are breaking down, and geopolitical change is unpredictable and carries all sorts of risks. The Arab Spring, which fostered hope, has turned into a bloody winter of discontent, and Americans have been killed in the sanctuary of their own embassies.

Meanwhile, the U.S.’s strategic objectives and mission abroad are also changing rapidly. China and Russia are now building massive military complexes as “defensive” measures against the overwhelming presence of U.S. military capability in Asia Pacific, the Middle East and Europe. China is expanding its national security perimeters and has threatened war with its neighbors over natural resources and maritime borders. The Russian leadership, including Vladimir Putin, is preparing for war and plans to spend nearly a trillion dollars over the next decade on intercontinental ballistic missiles, fighter aircraft, submarines and sophisticated warships.

Muscle-Flexing

On September 16 an International Mine-Sweeping Coalition consisting of more than 30 nations began an unprecedented 10-day exercise off the coast of Iran with an armada of warships, including U.S. Nimitz-class vessels transporting about 70 tactical fighters. The muscle-flexing in the Strait of Hormuz was meant to intimidate the Iranian leadership. Moscow let it be known that “wars often begin through a provocation,” and Beijing concurred that the U.S.-led exercise was “extremely explosive.”

But the stuff really hit the fan on September 17, when Secretary of Defense Leon Panetta announced the U.S. intends to build another missile defense station in Japan aimed at “rogue states.” The Russians and Chinese were incited further and increased their opposition rhetoric about being encircled by U.S. aggression. Moscow said “today” there is imminent danger of a thermonuclear confrontation with the U.S. Beijing warned “its longstanding nuclear policy of ‘no first use of nuclear weapons’” has changed.

Taiwan is another flashpoint for the U.S. as Beijing is claiming sovereignty over the nation of more than 20 million. China has strategically positioned about 1,600 Dong Feng 16 missiles aimed directly at the island nation. Meanwhile, the 1979 Taiwan Relations Act requires that the U.S. sell arms to Taiwan, and it has sold more than $25 billion worth, including $10 billion since 2003, making Taiwan the largest recipient of U.S. arms sales during that period.

Senator McCain is way off base about the unimportance of the Jones Act for national security. Must “free trade” mean total access by foreign carriers to America’s coastlines and inland arteries? McCain has continually voted against any measure that would afford more Americans jobs, but always votes for agricultural interests so that highly subsidized farmers can sell a few more bushels overseas.

A Few Rocks for the Administration

Since taking office the Obama Administration has done absolutely nothing to advance the interests of the U.S. maritime sector, develop its infrastructure or create jobs for mariners and shipbuilders. In fact, the maritime industry has endured too many Administration-sponsored waivers to the Jones Act and cargo preference laws, which are meant to sustain a strong U.S.-flag presence in the world.

The U.S. Merchant Marine suffered a body blow when cargo preference for food aid was slashed from 75% to 50% in the Transportation Reform Bill. Moreover, the 2013 DOT budget was increased by $1.4 billion to $74 billion and was lavished with an additional $492 billion (a 34% increase) over six years for air, rail and surface transit. Meanwhile, the Maritime Administration got $344 million for its 2013 budget.

In 2010 the selection of David Matsuda as Administrator of the Maritime Administration was notice to the industry that maritime was no longer an important transportation strategy. Where are all the admirals? Additionally, the appointments of an Army colonel to be Superintendent of Kings Point and a Navy captain as Deputy Administrator of MarAd underlined the lack of experience required by the Secretary to manage the maritime sector.

The Maritime Security Program (MSP), which expires in 2015, has been reauthorized until 2025, and 60 ships will be guaranteed $2.82 billion. While Congress must authorize the program each year and the system provides jobs for U.S. mariners, more than half the tonnage is owned by foreign entities, and this negatively impacts the infrastructure of the U.S. shipbuilding industry.

The Coast Guard & Maritime Transportation Act of 2011 appropriates $25.7 billion for the Coast Guard mission during the period 2012-2014, and everyone in the country will agree it is money well spent. The legislative measure also instructs the Secretary to assess the national maritime system for short sea shipping and report back to Congress in five years. But in the same section (406), Congress also terminates the short sea shipping program on September 30, 2017. The language is a paradox within an enigma, and it spins the spin.

Further in the bill, the Maritime Administrator is given discretion and authorization to waive compliance with the Jones Act based on the non-availability of qualified U.S. tonnage. Again, the vague semantics simply means that foreign operators will transport essential oil and gas and heavy-lift for national defense considerations.

Since being in office the Administration’s agenda has been to outsource the U.S. maritime and MSP military mission, which is now in the hands of Denmark, Sweden, Norway and Germany. Senator McCain wants to tear down the walls of U.S. cabotage, but would the nation be safer?

In the movie Forrest Gump, Jenny throws rocks at the home where she was raised by an abusive father. And when there are no more rocks, Forrest says in his simple but stinging logic, “Sometimes there’s just not enough rocks.” The home was later bulldozed. – MarEx